China bank regulator warns of property-loan risks

EstherFung

SHANGHAI -(MarketWatch)- Chinese banks must closely monitor risks from property loans, and increase risk inspection and frequency of site visits given the current state of the property market, China's banking regulator said in a quarterly report Thursday.

Banks need to have comprehensive control over credit firms' financing channels. In implementing differential mortgage policies, they should give priority to loan requests from first-time home buyers and owner-occupiers, China Banking Regulatory Commission said in its third quarter report on Chinese banks' operations.

China's massive residential real estate sector is currently under pressure after a two-year government campaign to cool a once red-hot market.

Property sales in China have weakened in recent months, while developers have started to cut prices in some projects to boost sales, especially in major cities.

According to China Real Estate Index, a private data provider, average new home prices in Shanghai and Beijing fell 0.44% and 0.23% respectively in October from a month earlier.

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